Natural Gas Price Holds Slight Gain Following In-Line Inventory Withdrawal

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The U.S. Energy Information Administration (EIA) reported Thursday morning that U.S. natural gas stockpiles decreased by 141 billion cubic feet for the week ending December 14.

Analysts were expecting a storage withdrawal in a range of 116 billion to 146 billion cubic feet. The five-year average for the week is a withdrawal of 144 billion cubic feet, and last year’s withdrawal totaled 166 billion cubic feet. Natural gas inventories fell by 77 billion cubic feet in the week ending December 7.

Natural gas futures for January delivery traded up about seven cents in advance of the EIA’s report, at around $3.80 per million BTUs, and edged higher to around $3.82 after the report was released.

For the period between December 19 and December 25, NatGasWeather.com expects “low” demand and offers the following outlook:

A strong weather system will bring heavy rain to the Southeast today, then track up the East Coast Fri-Sat with rain and snow, just not very cold compared to normal. Mild conditions will dominate most of the rest of the country with highs of 40s and 50s north and 60s to locally 70s elsewhere. There will be a brief cold shot across the Midwest and East next week, focused around Christmas Eve for locally stronger demand. The West will see weather systems with valley rains & mountain snows.

Total U.S. stockpiles decreased week over week from 19.9% to 20.1% below last year’s level and also fell from 19.9% to 20.6% below the five-year average.

The EIA reported that U.S. working stocks of natural gas totaled about 2.773 trillion cubic feet at the end of last week, around 720 billion cubic feet below the five-year average of 3.493 trillion cubic feet and 697 billion cubic feet below last year’s total for the same period. Working gas in storage totaled 3.470 trillion cubic feet for the same period a year ago.

Here’s how share prices of the largest U.S. natural gas producers reacted to today’s report:

  • Exxon Mobil Corp. (NYSE: XOM), the country’s largest producer of natural gas, traded down about 0.8%, at $70.21 in a 52-week range of $69.60 to $89.30. The low was set earlier this morning.
  • Chesapeake Energy Corp. (NYSE: CHK) traded flat at $2.02, in a 52-week range of $1.93 to $5.60. The low as posted this morning.
  • EOG Resources Inc. (NYSE: EOG) traded up less than 0.1% to $93.00. The 52-week range is $90.87 to $133.53. The low also was posted earlier this morning.

In addition, the United States Natural Gas ETF (NYSEARCA: UNG) traded up about 2.7%, at $30.95 in a 52-week range of $20.40 to $39.87.